CIBC first out

Canadian Imperial Bank of Commerce, the first of the country's banks to set up an insurance subsidiary, has also become the first to enter the auto insurance market.Earlier this month in Ontario, cibc launched its Direct Auto Insurance program, a 1-800...

Canadian Imperial Bank of Commerce, the first of the country’s banks to set up an insurance subsidiary, has also become the first to enter the auto insurance market.

Earlier this month in Ontario, cibc launched its Direct Auto Insurance program, a 1-800 call-in service that got more than 15,000 calls in its first week of operation.

Advertising for the new venture is being created by cibc agency-of-record Padulo Integrated of Toronto.

The launch campaign, entitled ‘The better Way To Car Insurance,’ comprises direct mail, print and radio.

Mary Newman, vice-president marketing for CIBC General Insurance Company and The Personal Insurance Company, says the financial institution intends to test a wide variety of media, including traditional tv, during the next year in order to gauge responsiveness to the new 1-800 number.

Newman expects that, down the road, infomercials will also be added to the mix.

CIBC General Insurance will market Direct Auto Insurance in Ontario this year, and then look to the rest of Canada – except Manitoba, Saskatchewan and b.c. – which have public auto insurance programs in place.

Eventually, home insurance products will be introduced.

Mass market

Newman says restrictions in the Bank Act have led cibc to mass market the insurance product, rather than concentrate on existing bank customers.

Under the regulations, a direct mail offering to bank customers would have to include all the bank’s customers, and responses to a mailing of that magnitude could overwhelm the call centre.

For several years, banks have been able to sell travel and creditor insurance, underwritten or guaranteed by third-party companies, through their branches.

In June 1992, changes were made to the Bank Act which allowed banks to buy or build insurance subsidiaries, as long as they did not sell the insurance products through branches.

cibc applied for its federal insurance licence in May 1993 and has built CIBC General Insurance from the ground up.

Early last year, it acquired The Personal Insurance Company of Canada, which markets employer-sponsored group home and auto insurance.

The Toronto Dominion Bank is launching TD General Insurance next month to sell home and auto insurance first in Ontario, and, eventually, across Canada.

td is expected to market only to bank customers and to restrict its initial offering to customers of its Green Line Investor Services.

BNS shell company

The Bank of Nova Scotia bought a shell company called Glacier Insurance last October.

It has since been renamed Scotia Life Insurance and federal licences were reactivated Jan.1.

Oscar Zimmerman, president of Scotia Life, says the company will be keeping its operation simple.

Zimmerman says Scotia Life will restrict its offering to life insurance for now, marketing only to bank customers over the phone and through the mail.

Robert Martin, senior manager of insurance services with the Bank of Montreal, would not discuss the bank’s future plans in the areas of insurance.

But, Martin says a new insurance division has not been started.

Royal Bank is positioning itself to enter the marketplace with the appointment of a new head of insurance activities.

James Westlake, previously vice- president and chief operating officer of Metropolitan Life Insurance, joins the bank at the end of this month.

Emile Bolduc, Royal Bank vice-chairman and chief financial officer, says Westlake’s top priority will be to take a look at the bank’s insurance programs.

Bolduc says Westlake has been told to come up with a new strategy within the next six months.